Mark Carney: People are earning 3.5% less than we estimated before the EU referendum

Mark Carney says Brexit has hit wages and pushed up
inflation, meaning people are earning less than the Bank of
England had forecast prior to Brexit referendum.

Pressure is expected to ease later this year.

LONDON - Bank of England Governor Mark Carney said on Wednesday
that real incomes are set to be 5% below pre-referendum forecasts
by the end of this year.

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Appearing before the Treasury Select Committee on Wednesday,
Carney said that British incomes are currently 3.5% below where
the central bank had forecast them to be prior to the June 2016
vote to leave the European Union.

Economists' forecasts have been ridiculed for their inaccuracy in
many pro-Brexit circles but Carney said the figures were "to be
expected" given the effects of the Brexit vote on the economy.

"We're in a transition period or a pre-transition period is
perhaps a better way to put it," Carney told the Treasury Select
Committee.

The pound sank to multi-year lows against both the euro and
dollar in the wake of the vote, which has led to high inflation.
Inflation rose rapidly after the vote and
currently sits at 3%, well above the Bank of England's target
of 2%.

Meanwhile, investment and wage growth have failed to keep pace.
Wage data also out on Wednesday shows
pay packets increased by 2.5% in January - meaning people are
effectively seeing real wage declines of 0.5%.

The cumulative effect is British people have less money in their
pockets than the Bank had expected them to have at this point in
time.